ttu^  liilillllliiiiiililli  ;l^3^' 

^^3^  D03212482M  ^,,  ^ 


CONFEDERATE  STATES  OF  AMERICA,  ^ 

Treasury  Department,      ^ 

Richmond,  October  15tli,  1861.  ) 

The  Commissioners  Appointed  to  Receive  Subscriptions  to  the 
Produce  Loan  ; 

Gentlemen  : 

Enquiries  have  been  made  from  various  quarters 

1.  Whether  during  the  continuance  of  the  Blockade,  ef- 
forts shouhl  be  made  to  procure  further  subscriptions. 

2.  Whether  the  Government  will  authorize  promises  to 
be  held  out  of  aid  to  the  planters,  as  an  inducement  to  such 
further  subscriptions. 

The  first  inquiry  seems  to  imply  a  misundei^gtanding  of 
the  scheme  of  the  subscriptions.  Many  persons  have  sup- 
posed that  the  Government  was  to  have  some  control  of 
the  produce  itself;  others  that  the  time  of  sale  appointed  by 
the  subscription,  was  to  be  absolute  and  unconditional.  The 
caption  at  the  head  of  the  lists,  when  examined,  will  correct 
both  these  errors.  The  subscription  is  confined  to  the  pro- 
ceeds of  sales,  and  contains  an  order  on  the  Commission  mer- 
chant or  factor  of  the  planter  to  pay  over  to  the  Treasurer 
the  amount  subscribed,  in  exchange  for  Confederate  Bonds. 
The  transaction  is  simply  an  agreement  by  tne  planter  to 
lend  the  Government  so  much  money  ;  and,  in  order  to  com- 
plete the  transaction,  a  time  and  place  are  appointed  when 
and  where  the  parties  may  meet  to  carry  it  out.  The  im- 
portant point  is,  that  it  shall  certainly  be  completed  at  some 
time,  and  that  is  secured  by  the  engagement  of  the  planter. 
Whether  that  time  be  December  or  June  is  simply  a  ques- 
tion of  convenience,  and  works  no  injury  to  either  party. 
The  Government  is  sure  of  the  eventu'  1  payment,  and  de- 
rives from  that  certainty  so  much  credit;  and  it  loses  noth_ 
ing,  because  it  gives  its  bond  only  when  the  money  is  paid. 


It  is  obvious,  therefore,  that  the  subscriptions  are  quitt 
valuable  to  the  Government  during  the  blockade,  as  afte^ 
The  blockade  simply  suspends  the  completion  of  the  eng 
ment.     It  becomes  the  interest   of  both  parties  to  Avait  f 
good  price,  and  the  Government   will   readily   consent  i 
postponement  of  the  sale. 

You  jjcrceive,  therefore,  that  it  is  desirable  to  continue 
your  exertions  to  increase  the  subscriptions ;  and  you  arc 
authorized  to  say  that  the  Government  will  consent  to  a 
reasonable  extension  of  the  time  appointed  for  sales. 

2.  The  next  inquiry  is  as  to  a  promise  of  material  aid 
from  the  Government  to  the  planters. 

In  answ^ering  this  enquiry,  I  am  to  speak  in  advance  of 
any  action  of  Congress.  What  that  body  may  see  fit  to  do, 
it  is  not  for  me  to  determine.  I  can  express  merely  the 
views  of  this  Department,  and  these  must  govern  your  ac- 
tion, until  r;iversed  by  a  higher  authority.  It  would  be  a 
sufficient  answer  to  the  enquiry,  to  say,  that  the  action  of  the 
Government  is  settled  by  the  Constitution.  No  power  is 
granted  to  any  Department  to  lend  money  for  the  relief  of  any 
interest.  Even  the  power  of  Congress  in  relation  to  money 
is  confined  to  borrowing,  and  no  clause  can  be  found  which 
would  sanction  so  stupendous  a  scheme  as  purchasing  the 
entire  crop  Avith  a  view  to  aid  its  owners.  But  it  may  be 
said  that  the  Constitution  of  the  Provisional  Government 
may  be  altered  by  Congress,  and  that  it  is  the  duty  of  this 
Department  to  prepare  the  way  for  such  alteration,  if,  in  its 
judgment,  the  financial  necessities  of  the  country  demand 
the  change. 

I  am  not  disposed,  then,  to  close  the  enquiry  with  the 
abrupt  answer  thus  made  by  the  Constitution ;  aAd  will 
proceed  to  consider  the  subject  upon  its  intrinsic  merits. 

Two  plans  of  relief  have  been  proposed.  The  one  is  that 
the  Government  should  purchase  the  entire  crop  of  the  coun- 
try ;  the  other  that  an  advance  should  be  made  of  part  of 
its  value.  In  either  case  the  payment  is  to  be  made  by  the 
issue  of  Treasury  notes,  and  therefore,  if  Ave  put  aside  for  the 


present,  the  many  and  serious  objections  to  tlie  possession,  '-^  Caj/ 
transportation  and  management  of  tlie  crop  by  the  Govern- 
ment, it  becomes  simply  a  question  of  amount.  To  purchase 
the  whole  crop  would  require  its  whole  value,  less  the  amount 
of  the  subscriptions  made  to  the  Government.  If  we  estimate 
the  Avhole  crop  of  cotion  at  200  millions  and  the  subscriptions 
at  50  millions,  the  purchase  Avould  then  require  150  millions 
of  Treasury  notes,  and,  if  to  this  sum  be  added  the  amount 
of  values  for  other  agricultural  products,  which  would  cer- 
tainly claim  the  same  benefit,  the  sum  required  would  proba- 
bly reach  1 75  millions. 

The  amount  called  for  by  the  other  plan  of  making  an  ad- 
vance, would  depend  upon  the  proportion  of  that  advance. 
Few  of  the  advocates  of  this  plan  have  put  it  lower  than  5 
cents  per  pound  on  cotton,  and  at  the  same  rate  upon  other 
produce.  It  may,  therefore,  be  very  fairly  set  down  at 
about  one  hundred  millions. 

If  Ave  consider  first,  the  least  objectionable  of  these 
plans,  it  is  certainly  that  which  requires  the  smaller  sum; 
and  if  this  be  found  impracticable,  the  larger  must  of  neces- 
sity be  rejected.  Our  enquiry,  then,  ma}"  be  narrowed  doAvn  to 
a  proposal  that  the  Government  should  issue  100  millions  of 
Treasury  notes,  to  be  distributed  among  the  planting  com- 
munity upon  the  pledge  of  the  forthcoming  crop. 

The  first  remarkable  feature  in  this  scheme  is,  that  it  pro- 
poses that  a  new  Government,  yet  struggling  for  existence, 
isliould  reject  all  the  lessons  of  experience,  and  undertake 
that  whicli  no  Government,  however  long  established,  has 
yet  succeeded  in  effecting.  The  "  organization  of  labor" 
has  called  forth  many  ingenious  attempts,  both  speculative 
and  practical,  among  well-established  Governments,  but  al- 
ways with  disastrous  failure.  With  us,  however,  the  exper- 
iment is  proposed  to  a  new  Government,  which  is  engaged  in 
a  gigantic  war,  and  which  must  rely  on  credit  to  furnish 
means  to  carry  on  that  war.  Our  enemies  arc  in  possession 
of  all  the  munitions  and  work-shops  which  have  been  col- 
lected  during  forty-five  years  of  peace — their  fleets  have 


been  built  up  at  our  joint  expense.  With  all  these  on  hand, 
they  yet  arc  obliged,  to  expend  nearly  ten  millions  of  dollars 
per  week  to  carry  on  the  war.  Can  we  expect  to  contend  with 
them  at  less  than  half  that  expenditure  ?  Supposing  that  it 
may  require  200  millions  of  dollars ;  then  the  proposal  is 
that  at  a  time  when  we  arc  called  upon  to  raise  this  large 
sum  for  the  support  of  Government,  we  shall  raise  a  further 
sum  of  100  millions  for  the  benefit  of  the  planting  interest. 

For  it  must  be  observed,  first,  that  the  Government  re- 
ceives no  benefit  whatever  from  this  advance.  The  money 
is  paid  to  each  individual  planter,  and  in  exchange  the  Go- 
vernment receives  only  his  bond  or  note — or,  if  the  cotton 
be  purchased,  the  Government  receives  only  certain  bales  of 
cotton.  That  is  to  say,  the  Government  pays  out  money 
which  is  needful  to  its  very  existence,  and  receives  in  ex- 
change planters'  notes  or  produce,  which  it  does  not 
need  and  cannot  in  any  way  make  use  of. 

It  must  be  observed,  in  the  next  place,  that  Treasury 
Notes  have  now  become  the  currency  of  the  country.  They 
are,  therefore,  at  present,  the. measures  of  value.  In  this 
view  it  is  the  duty  of  the  Government  to  limit  their  issue, 
as  far  as  practicable,  to  that  amount  which  is  the  limit  of  its 
currency.  Every  person  acquainted  with  this  branch  of 
political  science,  is  aware  that  if  the  currency  passes  this 
point,  it  not  only  becomes  depreciated,  but  it  disturbs  the 
just  relations  of  society,  precisely  as  though  an  arbitrary 
authority  should  change  the  weights  and  measures  of  the 
country.  If  the  currency  of  a  country  should  be  suddenly 
extended  from  one  hundred  to  two  hundred  millions  of  dol- 
lars, that,  which  was  measured  by  one  dollar  is  now  mea- 
sured by  two,  and  every  article  must  bo  rated  at  twice  its 
f(U"mer  price.  Of  course  all  contriicts  are  disturbed. 
The  debt  incurred  ])efore  the  increase  is  dischnrged  by 
paying  one-half  its  former  value ;  and  each  article  pur- 
chased must  be  paid  for  at  double  its  former  price.  The 
Government,  tVoiii  the  necessities  of  war,  is  the  Inrgest  of 
all  i)urchasers,  and  thus,  by  a  kind  of  suicidal  act,  compels 


itself  to  pay  two  dollars  for  Avliat  one  would  have  formerly 
purchased.  And,  at  this  rate  of  advance,  two  hundred  mil- 
lions of  dollars  can  effect  no  more,  than  one  hundred  mil- 
lions of  dollars  would  have  effected  before  ;  or,  in  other 
words,  one  hundred  millions  of  dollars  are  actually  sunk  in 
the  operation. 

Such  a  condition  of  the  currency,  the  Government  has 
anxiously  endeavored  to  guard  against.  The  war  tax  was  laid 
for  the  purpose  of  creating  a  demand  for  Treasury  Notes,  and 
a  security  for  their  redemption.  Their  rcdundanc}^  has  been 
carefully  guarded  against  by  allowing  them  to  be  funded  in 
eight  per  cent  bonds.  If  necessity  shall  compel  the  Gov- 
ernment to  issue  for  the  defence  of  the  country,  and  to  keep 
out  two  hundred  millions,  it  is  plain  that  every  accession 
must  impair  and  may  defeat  all  these  precautions. 

If  the  Government  should  undertake,  for  the  sake  of  pri- 
vate interests,  so  large  an  increase  of  issues,  it  may  hazard 
its  entire  credit  and  stalnlity.  The  experiment  is  too  dan- 
gerous, and  relief  for  the  planters  must  be  sought  in  some 
other  direction.     And  m;iy  not  that  remedy  be  found  ? 

In  the  first  place,  let  tlie  planters  immediately  take  mea- 
sures for  winter  crops,  to  relievo  the  demand  for  grain  and 
provisions.  Let  them  proceed  to  divert  part  of  their  labor 
from  cotton,  and  make  their  own  clothing  and  supplies. — 
Then  let  them  apply  to  the  great  resource  presented  l)y  the 
money  capital  in  banks  and  private  hands.  Let  this  capital 
come  forward,  and  assist  the  agricultural  interest.  Hereto- 
fore the  l)anks  liave  employed  a  large  part  of  their  capital 
in  the  purchase  of  Northern  exchange.  Let  them  apply  this 
portion  to  factors'  acceptances  of  planters'  drafts  secured  by 
pledge  of  the  produce  in  tlie  planters'  hamls.  An  extension 
of  the  time  usually  allowed  on  tliese  drafts,  would  overcome 
most  of  the  difficulties.  This  extension  could  safely  reach 
the  probable  time  of  sale  of  the  crops,  inasmuch  as  the  sus- 
pension of  specie  payments  throughout  the  entire  Confede- 
racy, relieves  each  bank  from  calls  for  coin.  The  banks  are 
accustomed  to  mana"-e  loans  of  this  character,  and  will  con- 


6 

duct  the  operation  with  such  skill,  as  will  make  them 
mutually  advantageous.  The  amount  of  advance  asked  from 
the  banks,  would  be  greatly  less,  than  if  advances  Avere  oifer- 
ed  by  the  Government ;  and  all  the  abuses  incident  to  Gov- 
ernment agencies,  would  be  avoided. 

It  seems  to  me,  therefore,  that  it  is  neither  necessary  nor 
expedient  that  the  Government  should  embark  upon  this  dan- 
gerous experiment  It  h  far  better  that  each  class  of  the 
community  should  endeavor  to  secure  its  own  existence  by 
its  own  exertions,  and  if  a'l  oifcrt  be  at  once  made  by  so 
intelligent  a  class  as  the  planters,  it  will  result  in  relief. 
Delay  in  these  efforts  ocoasion^d  by  vague  expectations  of 
relief  from  Government,  which  cannot  be  rc.lissd,  may  de- 
feat that  which  is  yet  practicable. 
Respectfully, 

Your  obedient  servant, 

C.  G.  MEMMINGER, 

Secretary  of  the  Treasury. 


INSTRUCTIONS  FOR  THE  AGENTS  FOR  COE- 
LECTINQ  SUBSCRIPTIONS  TO  THE  PRO- 
DUCE LOAN. 

CONFEDERATE  STATES  OF  AMERICA,  j 

Treasury  Department,  > 

Richmond,  January  3rd,  1862.       ; 

The  following  Instructions  are  issued  for  the  gui- 
dance and  direction  of  the  Agents  for  collecting  sub- 
scriptions to  the  Produce  Loan : 

1.  The  General  agents  will  immediately  on  re- 
ceipt of  the  Lists  of  Subscriptions  from  the  Register 
of  the  Treasury,  appoint  a  subordinate  Agent  at  each 
place  in  the  State  in  which  he  is  appointed,  where 
subscriptions  are  to  be  paid,  (other  than  the  place  of 
his  own  residence,)  and  shall  report  the  same  for  the 
approval  of  the  Secretary  of  the  Treasury,  and  shall 
furnish  such  Agent  with  Lists  of  the  Subscriptions 
payable  at  such  place. 

2.  At  the  time  appointed  for  the  sale  of  any  pro- 
duce, or  whenever  such  sale  shall  take  place,  the 
Agent  shall  apply  for  the  proceeds  due  under  the 
subscrijDtion,  and  may  receive  the  same  in  coin,  Treas- 
ury Notes,  or  approved  Foreign  Bills  of  Exchange 
drawn  against  the  sale,  and  taken  at  the  current  mar- 


"ket  Tcatc  ;  and  for  the  said  proceeds,  shall  deliver  to 
the  subscriber  a  receipt  exchangeable  for  Bonds  or 
Stock,  to  be  issued  under  the  Act  of  August,  1861, 
for  such  period  beyond  live  years  as  the  subscriber 
may  select ;  and  if  the  particular  period  shall  have 
been  exhausted,  the  nearest  remaining  will  be  fur- 
nished instead. 

3.  Each  sub-Agent  will  report  and  pay  weekly  to 
the  General  Agent  of  his  Division,  or  to  such  Assis- 
tant Treasurer  or  Depositary  as  he  may  direct,  all 
moneys  collected. 

4.  The  General  Agents  will  report  weekly  to  the 
.Secretary  of  the  Treasury,  and  at  same  intervals  de- 
posit all  moneys  received  with  the  nearest  Assistant 
Treasurer  or  Depositary. 

5.  The  General  Agents  will  receive  from  the  Treas- 
urer the  Bonds  or  Certihcates  of  Stock  called  for  by 
the  receipts,  and  will,  with  the  aid  of  their  sub-Agents 
.be  the  medium  to  exchange  the  same  with  the  hold- 
ers of  the  receipts. 

6.  The  compensation  of  both  General  and  sub- 
Agents  shall  be  a  brokerage  at  the  following  rates  ; 
but  no  brokerage  shall  be  charged  by  the  General 
Agent  on  moneys  paid  over  by  the  sub-Agents  : 

RATES  OF  BROKERAGE  COMMISSIONS  TO  BE  ALLOWED. 

On  all  sums  of  $100,000  and  under,  one-half  of  one 
per  cent.;  on  all  sums  over  $100,000,  and  less  than 
$500,000,  one-fourth  of  one  per  cent,  additional ;  on 
all  sums  over  $500,000,  and  less  than  $1,000,000, 
one-eighth  of  one  per  cent,  additional ;  and  on  all  sums 
over  $1,000,000,  one-sixteenth  of  one  per  cent,  addi- 
,tional,  until  the  whole  compensation  of  any  one  Agent 


shall  reach  $3,000,  beyond  which,  no  charge  shall  be 
allowed. 

7.  All  Agents  shall  have  authority  to  receive  addi- 
tional subscriptions,  and  are  earnestly  requested  to 
take  all  measures  in  their  power  to  procure  the  same  ; 
and  they  will  be  furnished  with  blank  Subscription 
Lists  for  that  purpose. 

8.  Whenever  a  proposal  is  made  to  subscribe  Ar- 
my supplies  in  kind,  the  Agent  to  whom  it  is  made 
shall  report  the  same  to  the  nearest  Quartemaster  or 
Commissary,  and  upon  a  certificate  of  the  value  as 
adjusted  by  such  officer,  and  that  the  article  has  been 
received,  the  said  Agent  shall  issue  a  receipt  for  the 
amount  so  certified,  and  report  the  same  to  his  prin- 
cipal, or  to  this  Department. 

C.  G.  MEMMINGER, 

Secretary  of  the  Treasury. 


ADDITIONA[.    [NSTRUCTIOXS   TO   PRODUCE   LOAN     / 

AGENTS. 

Treasury  Department,  } 
March  1,  1862.      \ 

T\w  following'  are  additional  instructions  to  agents  for  col- 
lecting subscriptions  to  the  Produce  Loan  : 

1.  All  agents  shall  transmit  to  the  Secretary  of  the  Trea- 
sury, from  time  to  time,  the  original  lists  of  subscriptions  to 
the  loan,  after  having  taken  co])ies  for  their  own  use.  They 
shall  also  report  every  case  of  increase  or  diminution  of  sub- 
scriptions, whethei'  made  for  the  purpose  of  making  the 
amount  a  multiple  of  $  50  00,  wliich  is  the  lowest  denomina- 
tion of  bonds  issued,  or  for  any  other  purpose. 

2.  The  brokerage  commissions  allowed  to  agents  must  not 
be  retained  out  of  tlie  subscriptions  collected  by  them^  but 
will  be  i)aid  quarterly  \)y  the  Ti'easury  Dejjartment,  the  sev- 
eral quarters  ending  on  the  31  st  of  March,  the  oOth  of  June, 
the  oOth  of  September,  and  the  olst  of  December  respec- 
tively. At  the  end  of  each  quarter  the  agents  shall  i-cnder 
an  account  showing  the  amount  collected  during  the  quarter, 
together  with  the  commissions  charged  tliereon,  and  the  said 
•account,  when  approved  by  the  Secretary  of  the  Treasury, 
•will  be  referi'ed  to  the  accounting  officers  of  the  Treasury  for 

settlement. 

The  accounts  of  sub-agents  must  be  certified  by  the  general 
agents  and  transmitted' by  them. 

3.  The  general  agents  will  transmit  to  the  Secretar}'^  of  the 
Treasury,  with  their  own  reports,  copies  of  the  weekly  reports 
of  then*  sub-agents. 

(Signed,)*  r.  a.  MEMMINaER, 

Scrre/nri/  of  Ihe  Treasury. 


Hollinger  Corp. 
pH8.5 


